Why Airlines Cutting Free Food & Drinks On Longhaul Flights Isn’t A Bad Thing

Yesterday I wrote about how British Airways is considering cutting free food & drinks in economy on longhaul flights. This follows them having recently cut free food & drinks on shorthaul flights, which had people up in arms.

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On one hand it’s tough to imagine a day where most airlines charge for food and drinks on longhaul flights. At the same time, a decade ago it would have probably been hard to imagine that the “big three” US carriers would charge for carry-ons for some domestic fares. Even Emirates, which is known for being as full service as they come, sees a future where they unbundle business class. However, it would have probably also been hard to imagine that there would be an airline offering $65 transatlantic fares. It goes both ways.

Unbundled airfare isn’t necessarily bad

Unbundling is the future of the industry, and I think there are two ways to look at it. One way is to view airfare being unbundled as a negative development. The other option is to view it as being positive, given that it makes travel more accessible than ever before. Nowadays you can fly across the ocean for the same price you’d otherwise pay for an hour-long cab ride in some cities.

Consumers want low fares, but we also want more service. However, there’s no denying that we complain about the state of service on many airlines, and when airlines think of cutting those services or offering more options, we’re unhappy. In other words, “damnit airline food sucks, but don’t take it away!”

My point is that airfare is so much cheaper than it used to be, and that’s a good thing. And it’s even cheaper than it was a few years ago, at least on longhaul flights. Seriously, we’re consistently seeing $400-600 roundtrip fares between the US and Europe, and $600-700 roundtrip fares between the US and Asia.

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It used to be that fares like that were out of the ordinary and worth jumping on right away, while nowadays they’ve become commonplace.

How much more expensive is British Airways than Norwegian?

To do a side-by-side comparison, let’s look at fares between New York and London this fall. The cheapest British Airways fare I can find is $475 roundtrip.

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Meanwhile the cheapest Norwegian fare is $418.

Norwegian-Fare-1

So you’re paying an extra $57 roundtrip on British Airways, but are earning a more valuable points currency, getting a free checked bag, free food and drinks, etc. Clearly British Airways isn’t coming out ahead here, so should they be raising fares or cutting services?

I’m not cherry picking examples here, but rather I find these examples to be reflective of the average discrepancy in pricing. Between Los Angeles and London British Airways is even cheaper — they have roundtrip fares of $487.

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Meanwhile Norwegian’s fares are actually higher around the same time, at $510.

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To compare, here’s how much Norwegian would charge for what British Airways offers with the fare (these fees are one-way, so double them for a roundtrip):

  • $45-50 for a checked bag
  • $5 for a blanket
  • $3 for a headset
  • $4-5 per non-alcoholic drink, $7-15 per alcoholic drink
  • $45 for a pre-ordered meal, $10-11 per fresh food, $4-8 per snack

Norwegian is the standard of low cost longhaul travel, so you can’t expect a traditional carrier to have a lower cost structure than them. As a result, would we rather see British Airways consistently priced at least $200 higher than Norwegian per roundtrip, in order to be able to include all those services with the fares?

Some say they’ll never fly British Airways again if they get rid of free food & drinks in economy, but I think that sort of a protest is misguided. Want to send a message to airlines that you don’t like them cutting services? Pay for a different product! For example, look at British Airways’ pricing for premium economy. It’s $1,100 roundtrip, and gets you a bigger seat, free food, etc. The average economy fare between New York and London used to be closer to $1,100 than $500, especially in summer, where these premium economy fares are available as well.

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Heck, there are some dates in summer where premium economy is just a couple of hundred dollars more roundtrip than economy, which shows just how unwilling a majority of people are to pay a premium for a better product.

My conclusion

I guess my point is that I share the frustration at airlines cutting services. At the same time, international airfare is incredibly low, and that’s thanks to the competition from low cost carriers.

Traditional airlines have two choices:

  • Compete directly with the low cost carriers in economy, while also offering premium products for those willing to pay extra
  • Try to charge a significant price premium for offering better service in economy; I can’t think of an airline that has successfully done this

So I predict that in a decade an ultra low cost model on longhaul flights will be the norm rather than the exception. Personally I think that’s a good thing, since it makes flying more accessible to the masses.

I want to make one last point — I actually view the international airfare trend as being positive, unlike what we see domestically. Domestically we see airlines adding fees without lowering prices as a way to increase profits. There’s still very limited ultra low cost competition within the US — we just really have Spirit, Allegiant, and Sun Country.

Meanwhile on the international front, this is something airlines are forced to do because of innovative ultra low cost carriers that are actually making the industry better. That’s good for consumers, because these changes are being made so traditional airline can compete. And that actually gets consumers cheaper airfare and more options.

Comments

  1. fares are of course low in the shoulder and low seasons. Try the summer. I’m paying $1700 to go from DC to Europe round trip on United. I think it’s okay, but honestly would be annoyed if I paid that much and didnt have a meal. If I were paying $600 in the summer I could deal with it.

  2. I think you missunderstood BA – adding BOB does not mean you have to cut free food. It can be both. For example on Air France you can pay for an more exlusive ala carte meal in economy if you like but if not, you get the standard meal.

  3. Why is making flying accessible “to the masses” a good thing? So we can carry on spaffing out CO2 emissions for no good reason whatsoever?

  4. Was thinking the same thing. This gets into economics: perfect pricing. If airlines do this well it can mean everyone wins.

  5. @ Cristoffer Cedergren — That’s a possibility, but I don’t think that’s the end game. BA has been cutting in economy like crazy, and I see no reason they wouldn’t eventually eliminate free food and drinks in longhaul economy, just as they’ve done on shorthaul flights.

  6. BA strategy to save money shouldn’t stop at charging for every item involving travel separately. Executive salaries, pensions and administration staffing levels should match RyanAir levels as well. The stockholders would be even more impressed then.

  7. @ David — I’m not going to argue the environmentalist point, but I think there are perfectly valid reasons for people to travel. If you think all travel is “for no good reason whatsoever,” then I’m not sure there’s much I can say.

  8. The big difference here though is that BA are not a LOW COST LONG HAUL airline. They would have to advertise themselves as one if they really started doing this. I think then it would be a complete race to the bottom with people buying the lowest possible fare.

    Most of the time when I check Norwegian or BA to the states, DY is only a fraction cheaper.

  9. BA is cheap in this case cause you have a +3 day stay and a Saturday night.

    Try again with an outbound on Monday and a return 1 or 2 days later. Norwegian will probably still be <500$, but BA will be far above 1000$. Just like UA(&JV) and DL/VS (&JV).

    Many business travellers will anyway continue to pay 1500$ for a simple TATL return ex-LHR, and if BA would even charge for a simple meal these high yield passengers might move to the 'competing' legacy carriers, who's fares are probably exactly the same.
    Would be a very bad move if they do it for all economy booking classes.

  10. @Jason – we got R/T ATL-FRA in July for $570 on BA. How’s that for summer discount pricing? You have to jump on these fares fast but they are out there from time to time.

  11. Ben,

    I would like to see some reviews from you on the various Premium Economy products. I’ve investigated some of them (LH and BA for example), but I haven’t found much first-hand reviews of them.

    Another issue I think that is preventing Premium Economy from expanding is the fact that there isn’t really a good way to upgrade to Premium Economy offerings at a reasonable price.

    For example, many of us travel for our employer, which mandates the lowest economy fare available. We aren’t allowed to book anything else, even if we chip in our own cash. We can only “change” them after the fact and many airlines don’t make the upfare process easy. LH offers it via their website, but in most cases it is insanely expensive. Sometimes the total cost would exceed booking PE in the first place.

  12. There is a balance here someplace. I wish airlines would cut out drink service on short flights. I take a lot of 1 hour type flights for business. It just stresses me out to have the FA’s go up and down with the cart, block the isle and then rush around picking up cups. I think most people can manage an hour without half a can of diet coke. They could always have water on hand if someone requests it.
    On long haul flights I think food service should be normal, comfort type food and good. I don’t need airplane foie gras and weird gourmet stuff that doesn’t even taste right at altitude.

  13. I think the essential thing going on is this. Most customers see air travel as being a commodity product. They don’t perceive the differences among products. They choose the lowest price, oblivious as to whether one airline offers wider seats with more leg room — not to mention better (or complimentary) food, better online entertainment, free checked baggage, etc.

    Would someone reading this blog spend $5 more for a more comfortable seat for a 5 hour flight? Of course! Would the typical consumer? No.

    And that’s a bad thing, not a good thing. Why? Because airlines are cheapening their product, not improving it.

    Consumers vote with their dollars, and they’re voting for the lowest price. I’d rather they voted for comfort and service …

  14. While airlines are desperately trying to court the bargain-hunting traveller, they are leaving behind those of us seeking a little extra comfort who are willing to pay that bit more for it without breaking the bank.

    With flying now so accessible and common, for everyone willing to forego legroom, blankets and food there are just as many of us who would like to retain the perks, have a bit more space, comfort and service in order to endure the now more regular airborne journeys we now all seem to be taking.

    I’ll never be able to afford to pay for First but I want food and comfort! Why do airlines care so little for passengers like me?!

  15. Airlines cut these things saying fares will decrease. BUT they don’t. Or if they do, it’s only for a short while. Remember when fuel surcharges were implemented as a “temporary” measure? They’re not going away anytime soon. Remember when 2 checked bags was included in the tickets? Overhead bin space was plentiful, boarding happened reasonably quick. Then airlines started charging for bags, but the ticket prices never went down and the airlines unknowingly are carrying more weight than before. You better believe my carry-on weighs more than my checked luggage!

    Here’s my gripe: Airlines treat passenger service as something that is optional. Passengers are the only reason the airlines exist. Without passengers, you don’t have an airline. Either decide that you want to run a cargo operation or passenger operation and focus on your customers!

  16. Lucky, you seem to take the PR release as fact. You say they “have to” do this based on what inside information? Unless you’ve actually seen BA’s catering budget, for example, you are making an assumption. What about economies of scale? BA is a much bigger airline, with more routes and flights, therefore, they can negotiate better deals with their suppliers than Norwegian based on volume. Fuel, planes, food, salaries, benefits, infrastructure, overhead, all have different costs, and I don’t think you know enough about those at both airlines to accurately make a comparison, so that would mean you’re taking PR spin as fact.

    Just because an old, bloated company with no new ideas says they “have to” shaft customers, doesn’t make it true – shafting customers isn’t exactly a new idea. Case in point, anything Elon Musk touches. Read up on SpaceX for an example of how the “it can’t be done” mentality is the problem. People *will* pay for something that is seen as desirable or $800 purses wouldn’t exist. People don’t pay more for crappy airline seats with crappy food because they don’t see a difference (and you agree – this post agrees, and you complain all the time about BA). Eliminating the crappy food while leaving crappy seats and crappy service isn’t a solution to a problem; they don’t see those things as problems. BA is using low cost carriers as an excuse to make their existing crappy product even crappier while packaging it as “we have to do this to compete, wah, poor us”.

  17. Ben,

    You’re dead wrong here, for one primary reason: BA’s legacy (archaic) fare model. The LCCs let you book one-way fares and combine if you happen to need a round-trip. BA (and AA, UA, DL, etc.) does not. All of your examples were round-trips, fair enough, what about one-ways? HUGE difference. If the ‘un-bundling’ you seem to love does not also come with the un-coupling of the round-trip purchase requirements, it is definitely a bad result for consumers. Again, bottom line is if you are going to price like you’re some premium carrier with extra add-on benefits included, then deliver that and charge accordingly. Don’t take away benefits stating customers want choice, yet continue to charge enormous fare premiums on one-way tickets.

  18. I fly economy from YYZ to LAX for business trips on Air Canada’s 787’s, and I’ve got no complaints about them charging for food. For one thing, I can expense it so I don’t pay anyway. Secondly, our company still gets tickets cheaper than 10 years ago, even with the checked bag fee and paid food. Moreover, a chicken wrap is only CDN $8.95 which is about the same as the street price and they have to transport it. So there’s no way AC is making money on the food service. They also provide the same free entertainment selection as business class. Who wants the old days before deregulation when fares were sky high and you got all sorts of little perks like a hot breakfast on a 1 hour flight (yes, it’s true!). I’ve even got a complete set of American Airlines playing cards from a family vacation flight in 1977. That’s how profitable the airlines were back then.

  19. “Unbundling is the future of the industry…”

    Unbundling has been the future of the industry since 10 years ago when airlines started the initiatives to charge for checking bags. The public was promised “low, low fares!” and “pay only for what you consume” and boom, fares would drop. Which they did not. Or maybe they did. Who was ever to know? Right, the airlines, and were any metrics shared with the public? Of course not, since that’s proprietary/corporate secret. So the public was promised something that nobody in the public could ever refute, since nobody in the public could/will ever see the data.

    What the airlines are doing (charging à la carte for various things) is perfectly reasonable. However buying into their marketing about why they are doing this seems naive. I love you Ben, I really do, but this is a pure money grab. WHICH IS OKAY. But let’s call it what it is.

  20. I have been following this and other sites like this for a while now. I see these deals posted and try to find them for what I am looking for and I don’t see 400 or 500 dollar fares round trip when I search . I want to travel ORD to CGN or DUS.
    Is there someone who can really find these “deals” for me? I have to say right now the lowest fare I’m seeing is about 650. This is with one stop and not traveling over 13 hours. Even if I choose the new opportunity ORD has with WOW after I add on luggage they are not a good deal.

  21. ” I’m paying $1700 to go from DC to Europe round trip on United.”

    @Jason

    United, huh?

    Be sure to bring a goalie’s mask in case you do something to displease a gate agent and soldiers are called in to drag you away…

  22. i can understand them stopping the free food and drinks in coach class, but then they need to take cash payments for the items, not everyone has credit or debit cards.

  23. BA can’t appeal to the cheapskates in economy whilst also pandering to the filthy rich in first class. It won’t work, Lucky….I think you are just trying to get an invite to Señor Cruz’s next PR event….

    Any savings this creates is destroyed by all the negative PR it nurtures.

    But since you hate BA you wouldn’t care if they go bust…

  24. Unbundling MAY be the way of the future and FR & U2 DO offer considerably lower base fares as a result. However, from what I have seen BA is purportedly a mainline carrier whose competitive differentiation are these included perks. Without them they are just another low cost bus with the only investment (dont get me started on their “premium” product sham) ignoring the folk in the back of it. Its ironical that BA, who are making record profits, fly a crapped out old fleet (except the 787 & 77W) with a sub par product while US majors are investing back into the Y cabin, while maintaining better levels of profitability.

  25. Great post. Fully agree.

    “Free” food is irrelevant in my booking decisions. I’ll choose a carrier like BA over Norwegian any day, simply because BA as a network carrier with interline and alliance agreements with numerous other carriers has much better re-routing options in the event of IROPs than Norwegian or the like does.

    And then there’s the fact that the for purchase food is invariably much better/higher quality that the free slop.

    I fly 100K+ miles a year, largely in international coach, and I am all for BOB meals in the back.

  26. So when is Lucky posting his review of basic economy long haul flight.

    I’m sure the opinion would be exactly the same if First and Business meal were getting the axe

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